Japanese rubber futures snap winning streak as supply pressures ease

SINGAPORE: Japanese rubber futures snapped a five-session winning streak on Tuesday, as early tapping in China helped ease supply pressures, while inventories at the import hub of Qingdao continued to build.

The Osaka Exchange (OSE) rubber contract for September delivery edged down 0.1 yen, or 0.03 percent, at 380.6 yen (USD2.39) per kg. Still, the contract has gained 1.36percent so far this month.

The rubber contract on the Shanghai Futures Exchange (SHFE) for May delivery fell 135 yuan, or 0.82 percent, to 16,345 yuan (USD2,366.44) per metric ton.

The most active May butadiene rubber contract on the SHFE fell 450 yuan, or 2.53percent, to 17,350 yuan (USD2,511.94) per metric ton. The price of Thailand’s benchmark export-grade smoked rubber sheet (RSS3) rose 0.46percent, while block rubber fell 0.31percent. Early tapping in China’s rubber-producing areas of Yunnan is expected to gradually ease supply pressures, according to notes from Chinese brokers Shenyin Wanguo Futures and Guoxin Futures.

However, domestic tapping within China accounts for only a small portion of the top consumer’s overall supply. It mostly imports its rubber from top producer Thailand, whose tapping season is expected to resume in late April to May.